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Transit Fares & Equity

The 2013 City of Hamilton Budget deliberations by City Council are almost over, but one last important item will be discussed on Thursday, March 21st: transit fares.

City staff did not recommend increasing transit fares in this year’s budget. Councillors, however, voted to ask for a report on the potential revenue that could come from an incremental fare increase to cover the HSR’s rising price of fuel ($1.5M) and DARTS costs related to requirements under the Accessibility for Ontarians with Disabilities Act (AODA) ($1.4M). The information report in response to this request says that a $0.15 fare increase could cover the fuel costs and a $6 per year average property tax increase ($0.50 per month) could cover the AODA costs. A $0.15 fare increase would bump up the cost of a monthly pass by approximately $7, so an $84 annual increase.

The main argument for a fare increase is that Hamilton has a low transit fare compared to six other communities in Ontario highlighted in the report. But Hamilton also has seen much slower growth in ridership than these communities. A 2008 staff report on transit fares noted that Hamilton’s low fares were the most important driver of ridership, and that relatively low service levels were the main barrier to higher ridership. Last month, City Council unanimously adopted Rapid Ready: Expanding Mobility Choices in Hamilton which lays out a strategy to increase transit service throughout the city so the city can achieve its own goals of doubling current transit ridership. The funding for that plan will not be debated until the 2014 budget.

This week’s report notes Provincial gas tax money has been spent to enhance service on some routes, but “over the last 10 years no investments have been made by the City of Hamilton in Transit specifically for service expansion, whereas other Municipalities have invested in Transit and are seeing increased ridership on a per capita basis.”

The information presented to Council by staff does not include any context about income levels. Among the seven communities compared in this week’s report, the City of Hamilton has the lowest median income (using 2009 data from Statistics Canada), which is the main reason Hamilton’s fares have been kept at a relatively affordable price.

To provide a fairer comparison of fares, each community’s ability to pay should be taken into account. To better understand transit affordability we have calculated fares as a percentage of the median income (see chart below). Within this context, Hamilton’s fares are, in fact, among the least affordable.

The other important context is the price of alternatives to transit here in Hamilton, such as parking. Hamilton’s Rapid Ready report adopted by Council last month noted:

Downtown Hamilton has a significant supply of low cost parking, which limits the potential of this area to attract people to transit. This parking situation should be partially addressed by adopting the comprehensive city parking management strategy and downtown parking strategy/by-law. This parking strategy could be used to further enhance City policies to improve the market for transit ridership by limiting the parking supply, raising the cost of parking, etc. As a general target, the cost of parking in the Downtown Core should not be less than the cost of taking transit, which is not the case for most parking lots today. (Emphasis added)

An increase to transit fares, without an equivalent increase to downtown parking rates, would give more incentive for residents to drive downtown instead of taking transit, and would unfairly penalize transit users. The gap between monthly parking rates and a monthly transit pass will grow to $33 if a $0.15 fare increase is approved by Council, as illustrated in the chart below.

Another equity dimension is that transit users are more likely to be female, while drivers are more likely to be males. Increasing transit fares, with no increase in downtown parking rates, would increase the financial burden disproportionally on women. A recent SPRC report showed that Hamilton women are still paid substantially less than men, so have less disposable income to begin with.

The City has adopted important and achievable ridership targets for the benefit of the entire community, specifically so we can have better air quality, reduced rates of obesity and chronic diseases, spur economic development, and create a more inclusive city where those who can’t afford a car can still get to school, jobs and daily activities. A fare increase could put all of these goals at risk.